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* HSBC to start closing Korea retail branches on July 8
* HSBC leaves only global banking and markets unit
* 230 staff in Korea affected by closures
HONG KONG, July 5 (Reuters) - HSBC Holdings Ltd,Europe's biggest bank, will close its retail branch network andwealth management businesses in South Korea, leaving only theglobal banking and markets unit that serves corporate clients.
The closures, which begin on July 8, form part of HSBC'sglobal review which has seen it shut or dispose of 52 businessesworldwide since May 2011, the bank said on Friday.
HSBC will seek regulatory approval to close 10 of itsbranches in South Korea, leaving behind a single office tosupport the global banking and markets unit which helpscorporates raise capital, trade and invest.
"I don't find this a surprising decision. It's consistentwith what they've done elsewhere in closing subscale operationsand makes sense given the less favorable economics of runningretail banking in Korea," said Ian Gordon, an analyst atInvestec Securities who covers HSBC.
A Hong Kong-based HSBC spokeswoman said 230 staff in Koreawill be affected by the closures. They will be offered aredundancy package or the choice of working at the bank untilthe wind-down is completed, she said by telephone.
HSBC is not alone among global banks in having struggled tomake progress in retail banking in Korea. Standard Charterd may take a more than $1 billion hit on its Koreanbusiness, analysts said last month, after an aggressiverestructuring due to weak returns, a dispute with staff andtough regulations.
Standard Chartered has had troubles with its First Bankbusiness since it bought it in 2005 for $3.3 billion. It said inlate June that it will assess whether to write off some of the$1.85 billion goodwill value it has assigned to the business.
HSBC itself tried to invest more heavily in Korea by buyinga controlling stake in Korea Exchange Bank in 2007, beforeabandoning the attempt in September 2008 amid regulatorydifficulties and the developing global financial crisis.
The bank's decision to retain its global banking and marketsunit in Korea makes sense, said Investec's Gordon, allowing itto retain the profitable business of serving global clients whohave a presence in the country.
